A producer's / agent's binding authority is stated in his/her contract with the insurer. True or False?

The statement is true because a producer's or agent's binding authority is indeed defined within the terms of the contract they have with the insurer. This authority outlines the specific limits and conditions under which an agent can bind coverage on behalf of the insurance company.

Binding authority essentially empowers the producer to take action on behalf of the insurer without needing prior approval for each individual policy. This contract stipulates the types and limits of coverage the agent can commit to, ensuring that both the insurer and the agent have a clear understanding of the agent's role, responsibilities, and limits of authority.

Contracts can differ among insurers, and sometimes they may include specific provisions pertaining to certain types of policies or even vary depending on state regulations. However, the foundational aspect of binding authority comes from the contractual agreement between the agent and the insurer, making the assertion undeniably accurate.